Congress reaches payroll tax-cut deal

Thursday, February 16, 2012

(Reuters) - A payroll tax cut for 160 million Americans, set to expire at the end of this month, would be extended through December under a bipartisan deal announced early on Thursday by U.S. congressional leaders.

The accord would also renew expiring jobless benefits for millions of others and prevent a pay cut for doctors of elderly Medicare patients.

The comprehensive agreement represents a victory for President Barack Obama and his fellow Democrats in Congress, and allows Republicans to put behind them a tax debate that threatened to hurt them in the November elections.

Economists say the tax cut extension and renewal of jobless benefits should provide a lift to the U.S. economy, certain to be a key issue in the battle for control of Congress and the White House in the run-up to Election Day.

It was not immediately clear when the House of Representatives and Senate would vote on the deal, but lawmakers hoped to do so before they leave Friday for a week-long recess.

While congressional leaders announced a deal, they said a few undisclosed details had to be resolved before the agreement could be turned into a final bill. They expressed confidence this would be done quickly.